TikTok ban law upheld by US Supreme Court

The clock is officially ticking for TikTok in the United States.

Last Friday (January 10), lawyers for the social media app tried to convince US Supreme Court Justices to either scrap or temporarily block a law that could see TikTok banned in the market if its Chinese owner ByteDance doesn’t sell the app in the US by January 19.

Today (January 17), the Supreme Court announced its decision: The law will be upheld, which means TikTok’s US operations must be divested to avoid being shut down in the market – where it counts over 170 million users.

You can read the Court’s decision in full here.

The Information reported on Tuesday that TikTok is preparing for an immediate shutdown in the US on Sunday (January 19), the day the law comes into effect.

President-elect Donald Trump is reportedly mulling an executive order to suspend the law temporarily.

The proposed suspension – to last 60 or 90 days – would give the Trump administration time to find a buyer for TikTok’s US operations, or to find another solution, the Washington Post reported on Wednesday (January 15).

Trump’s inauguration is scheduled to take place on January 20.

The Protecting Americans from Foreign Adversary Controlled Applications Act, which will take effect on January 19, targets apps owned by companies in countries considered security threats by the US. President Joe Biden signed the law in April 2024.

TikTok is named as a concern under the law and US lawmakers warn that TikTok could share sensitive user data with the Chinese government. TikTok denies these claims.

US lawmakers warned Google and Apple last month that they must prepare to remove TikTok from their app stores by January 19, 2025, if its China-headquartered parent company ByteDance hasn’t sold the platform by that date.

While existing users may still use the app for a time, it may eventually become nonfunctional in the market.

Last Friday (January 10), during two hours of oral arguments, lawyers for TikTok were unable to convince the Supreme Court that the introduction of the law would violate its First Amendment free-speech rights.

The court also heard from TikTok’s lawyers about the difficulty in separating the TikTok app in the US without the recommendation algorithm that powers TikTok globally.

The app’s recommendation algorithm powers its ‘For You feed’, which ByteDance and TikTok describe as “one of the defining features of the TikTok platform”.

ByteDance has previously stated it has no plans to sell the platform in the US, with or without the algorithm, but that hasn’t stopped formal offers from coming in ahead of the January 19 deadline.

Last Thursday  (January 9), Project Liberty, founded by billionaire entrepreneur Frank McCourt, formally made what the organization calls ‘The People’s Bid’ for TikTok, and said that it aims to relaunch the platform on “a new, American-made digital infrastructure”.

Project Liberty said on Thursday that it has “the financial capacity to complete the transaction”, including “expressions of interest from investors, including major private equity funds, family offices, and high net worth individuals for adequate equity capital”. It said that it also has access to debt financing from “one of the largest banks in the United States”.

McCourt’s Project Liberty also said that it has “extensive backing from leading legal and financial advisors with strong experience navigating complex, high-stakes transactions on expedited timelines”.

“We’ve put forward a proposal to ByteDance to realize Project Liberty’s vision for a reimagined TikTok – one built on an American-made tech stack that puts people first,” said Frank McCourt, Founder of Project Liberty.

“By keeping the platform alive without relying on the current TikTok algorithm and avoiding a ban, millions of Americans can continue to enjoy the platform. We look forward to working with ByteDance, President-elect Trump, and the incoming administration to get this deal done.”

Elsewhere this week, Bloomberg reported that tech billionaire Elon Musk could potentially save the app. 

According to reporting from Bloomberg on Monday (January 13), citing sources, “Chinese officials are evaluating a potential option that involves Musk acquiring the US operations of TikTok if the app is banned”.

Bloomberg added that “it’s unclear whether the multibillionaire, TikTok and ByteDance have held any talks”.

In a response issued to the media following the publication of Bloomberg’s report, a TikTok spokesperson said: “We can’t be expected to comment on pure fiction.”Music Business Worldwide